CSR In Singapore

It’s been touted as the next business megatrend since the late 2000s but Singapore has yet to catch on in a big way. What exactly is corporate social responsibility and why does doing good make big sense for businesses and regular folk?

By Thusita De Silva

11 Tampines Concourse, developed by City Developments Limited is the first carbon-neutral development in Singapore and Asia-Pacific. Photo: City Developments Limited

In an ideal world, all businesses would be managed responsibly and ethically, and history would have no record of slavery, child labour and other human rights injustices, or a host of environmental violations. However, by definition, corporates are answerable only to their shareholders by increasing returns on their investments. How corporates achieve profits generally doesn’t come under scrutiny as long as they don’t break the laws of the countries they operate in — and laws evolve slowly and have loopholes and workarounds.

Despite that, some corporates have had enlightened leaders — usually the founders — who have believed that for business to thrive, the communities they operate in must also thrive. These corporates have led the way by instituting employee welfare, community benefits such as charitable donations and education, environmental compliance if not enhancements, and other initiatives that can now be seen as the earliest manifestations of what has become known as corporate social responsibility (CSR).

What is CSR, Exactly?

Examined in academic papers, corporate charters, media reports and blogs, the ubiquitous chatter makes CSR confusing to understand and even harder to define. It boils down to three key areas that measure responsible organisational success — social, economic and environmental. In past decades, these have become so closely tied with CSR that they have been defined as the “triple bottom line”, coined in the 1990s by John Elkington, founder of British consultancy SustainAbility. The first bottom line is the traditional profit and loss account, the second a measure of how socially responsible a company’s operations are, and the third measures environmental responsibility.

Depending on their business, some companies emphasise environmental protection, while others focus on helping local communities. In one way or another, they are practising CSR. Business ethics experts Matten and Moon summarise: “CSR is an umbrella term overlapping with some, and synonymous with other, concepts of business-society relations.”

This covers corporations associated with philanthropy, environmental sustainability, business practices that benefit society (e.g. fair trade), ethical management and more — a long list that generally involves doing good while pursuing profits.

Doing Right

With the recent financial crises, climate change, water scarcity and oil price issues, it’s clear there’s much not right in the world. All these problems hark back to businesses having taken routes that ignored the well-being of people and the planet. Their adverse impacts on lives have been unsurprising, and so has one of CSR’s big priorities — sustainability, which examines how business and industry are conducted so we can live without feeling like the sky might fall on our heads anytime.

“An almost alien concept 10 to 20 years ago, sustainability is finally taking centrestage globally today,”said Kwek Leng Joo, President of Singapore Compact for CSR, at its fourth international summit last September. Businesses cannot afford to ignore it anymore. “The bottom line isn’t the only line to consider,” he added.

“We do not have the option of not doing anything.”

Given decades of economic growth focus in Singapore, CSR has been slow filtering into business consciousness. This is changing as CSR advantages become apparent. Organisations adopting CSR plans are benefiting from the creation of a more rounded business environment, the feel-good and look-good effects, and even increased profitability.

“CSR is about how you make the money, not how you spend it,” says Bhavana Murjani, a senior executive at Singapore Compact. Set up in 2005, the national society encourages CSR practices across the island. However, a lack of awareness has meant poor CSR adoption in spite of seminars, training programmes, awards and other events promoting it to the business community. With only 420 business signed up as members out of 130,000 Singapore registered businesses, “it’s not where we would like it to be,” admits Murjani.

It has been an uphill battle because many companies, particularly small and medium sized enterprises (SMEs), are concerned with high operating costs in competitive Singapore. Murjani says, “SMEs always think that they are small and can’t do it. Secondly, they think it costs a lot of money. Thirdly, they tell us they don’t have enough manpower and resources.” Also, no legislation mandates that companies have CSR initiatives — that would be against the ‘doing good’ spirit of CSR.

Yet positive signs are stirring. For one, while SMEs are fixated on their bottom line, it does not mean a lack of desire to do right or to help. “I am not in a position to think about CSR,” said Soon Fee Moi, Managing Director of insulation fabricator Heptagon Industries. “I’m more focused on reducing my costs and growing the business. But if I’m asked to donate money for a worthy social cause, of course I would.”

Q&M Dental Group, founded in 1996 is more established than Heptagon. It’s Executive Director and COO Dr Raymond Ang agrees it is difficult for young companies to engage in CSR. “It’s only after we gained a critical mass that we could think more about giving back to society,” he says. Q&M has since offered its services to Project (smile), which is part of the national Community Health Assist Scheme helping low-income residents get subsidised dental and medical treatment at selected clinics.

Since the Singapore Exchange released sustainability reporting guidelines in June 2011, many major companies in Singapore now include a CSR component in their business reports. In keeping with the global trend of investors looking for companies that pay attention to environmental, social and governance issues, this move by SGX makes the stock market more attractive to foreign investors.

With it, CSR is no longer ‘good to have’ but becoming a ‘must-have’.

Doing Good and Doing Well

Several companies are leading lights for CSR in Singapore. One is property developer City Developments Limited (CDL). “We integrated CSR into our corporate vision and mission in the 1990s,” said Kwek, who is also CDL’s Managing Director. Embracing the triple bottom line approach, CDL was the first Singapore company to align its CSR practices with ISO 26000:2010 — Guidance on Social Responsibility. It is Singapore’s most decorated Green Mark private developer for its record in environmental sustainability. Green Mark, initiated by the Building and Construction Authority in 2005, aims at raising environmental awareness among developers, designers and builders (buildings contribute about 16% of Singapore’s carbon emissions). CDL is also the first local company listed on all three international sustainability benchmarks — the Dow Jones Sustainability Indexes, the FTSE4Good Index Series and the Global 100 Most Sustainable Corporations in the World.

The company believes “doing good and doing well” simultaneously is viable. Payoffs in investing to develop and manage green properties include more efficient use of natural resources and boosting the industry’s adoption of sustainable solutions. “We take pride in changing how the building sector operates,” added Kwek.

Cerebos Pacific Limited also views CSR as fundamental business practice. “Good CSR policies enhance the company’s reputation, build strong branding, which in turn improves stakeholder value,” said Eiji Koike, President and Group CEO of Cerebos. “This motivates the company to keep on improving,” he added.

Believing that “business thrives where society thrives”, staff volunteers from its Singapore head office and its Thai subsidiary went to Ayutthaya in May 2012 to repair Wat Nam-Tao School, which was badly damaged by 2011’s heavy floods. A new school was built and damaged furniture fixed. That year, the company rebuilt three rural flood-hit schools under its CSR programme and contributed S$100,000 towards their rebuilding and refurnishing.

Leading the Way

For CSR to flourish here, it’s critical that individuals like Kwek and Koike show their commitment and leadership. As President of Singapore Compact, Kwek is committed to helping local businesses start and sustain CSR programmes. Next is expanding outreach, particularly among the next generation of business leaders, to have them champion CSR when they join the work force.

In the overriding business mentality of survival and short term profitability, Singapore Compact is mulling how else it can boost CSR and inspire businesses large and small to make it part of their world. With a generation of more sustainably aware and vocal Singaporeans coming up, the tipping point can’t happen soon enough. It must, if we want a future for us and our children.